Stakeholder theory has been articulated in a number of ways, but in each of these ways stakeholders represent a broader constituency for corporate responsibility than stockholders. Discussions of stakeholder theory invariably present contrasting views of whether a corporation's responsibility is primarily (or only) to deliver profits to the stockholders/owners. Milton Friedman's (1912-) now-famous pronouncement that the only social responsibility of corporations is to provide a profit for its owners stands in direct contrast to those who claim that a corporation's responsibilities extend to non-stockholder interests as well.
One very broad definition of a stakeholder is any group or individual which can affect or is affected by an organization." Such a broad conception would include suppliers, customers, stockholders, employees, the media, political action groups, communities, and governments. A more narrow view of stakeholder would include employees, suppliers, customers, financial institutions, and local communities where the corporation does its business. But in either case, the claims on corporate conscience are considerably greater than the imperatives of maximizing financial return to stockholders.
Stakeholder theories have grown in number and type since the term stakeholder was first coined in 1963. According to R. Edward Freeman, whose work in stakeholder theory is well known, the stakeholder concept was originally defined as including "those groups without whose support the organization would cease to exist." As a part of management theory and practice, stakeholder theory takes a number of forms. Descriptively, some research on stakeholder theory assumes that managers who wish to maximize their firm's potential will take broader stakeholder interests into ...